Options Strategies

Overview

Longbridge offers two levels of options trading access, depending on your account type, trading experience, and financial profile.

Cash accounts can be approved for Level 1 or Level 2 strategies.
Margin accounts can apply for Level 2, which includes more advanced long and protective strategies.

All options trading requires prior approval and is subject to eligibility and risk review.

These are conservative strategies designed to generate income or enter stock positions at favorable prices.

Available strategies:

Covered Calls: Sell call options against stocks you already own.
Buy-Writes: Simultaneously buy stock and sell a call option on that stock.
Cash-Secured Puts: Sell puts while holding enough cash to buy the shares if assigned.

Includes all Level 1 strategies plus long (directional) and hedging strategies.

Available strategies:

Long Calls: Buy calls to benefit from a rise in the stock price.
Long Puts: Buy puts to benefit from a decline in the stock price or to hedge existing holdings.
Protective Puts: Purchase puts to limit downside risk on shares you already own.
Collars: Hold the underlying stock, buy a protective put, and sell a call to define both upside and downside potential.
Long Straddles: Buy a call and a put with the same strike price and expiration to benefit from large price moves in either direction.
Long Strangles: Buy a call and a put with different strike prices but the same expiration to capture potential volatility with less upfront cost than a straddle.

Some Level 2 strategies require a margin account for execution. Approval depends on your trading experience and risk profile.

You must complete an options trading application and receive approval before trading.
A minimum account balance may be required for certain strategies.
All strategies are reviewed for suitability based on your financial objectives and experience.

Options involve significant risk and are not appropriate for all investors.

Option buyers risk the entire premium paid if the option expires worthless.
Option sellers face potential assignment risk and must be prepared to buy or sell shares if assigned.
Leverage can magnify both gains and losses.